NOVA Chemicals declares FM on PE supplies from its plants in Canada

MOSCOW (MRC) -- NOVA Chemicals declared force majeure (FM) on all its polyethylene (PE) resins produced in the Sarnia region of Ontario, Canada, because of mechanical failures, reported S&P Global with reference to the company's letter to its customers as of April 27.

"NOVA Chemicals has experienced a mechanical failure beyond our control at our Corunna ethylene cracker in the Sarnia, ON, region, which supplies ethylene to our polyethylene facilities in that region," it said in the letter.

"As a result of the estimated repair timing and current inventory levels, we must declare a force majeure/excuse for nonperformance event for all polyethylene resins produced in the Sarnia region ... effective April 27, 2021," the letter said.

The FM does not affect any of its other PE products, it said. In addition, the letter stated there is no firm indication as to what extent they would be able to supply for customers during the force majeure.

The PE plants affected include Mooretown high density polyethylene (HDPE) at 210,000 mt/year, Mooretown low density polyethylene (LDPE) capacity at 170,000 mt/year, and St. Clair HDPE capacity at 209,000 mt/year.

As MRC informed before, in late 2013, NOVA Chemicals announced plans to expand ethylene production capacity by 20% at its cracker in Corunna, Ontario, from the capacity of about 839,000 tpy. The expansion was to occur between 2014 and 2018, as part of a wave of expansions and upgrades to NOVA's existing facilities near Sarnia, Ontario.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. LDPE and HDPE shipments increased.

NOVA Chemicals Corporation is a plastics and chemical company headquartered in Calgary, Alberta, Canada, and is a wholly owned subsidiary of the International Petroleum Investment Company (IPIC) of the Emirate of Abu Dhabi, United Arab Emirates.

BASF breaks ground on 3rd phase innovation campus in Shanghai

MOSCOW (MRC) -- BASF, the world's largest petrochemical company, has broken ground for the third phase of its Innovation Campus Shanghai in a move to strengthen its innovation capabilities in Asia and established an academic sounding board as part of the Network for Asian Open Research (NAO), as per the company's press release.

The expansion includes an additional research and development (R&D) building and one R&D workshop building. Construction is expected to be completed by the end of 2022; by then, the total investment of BASF into its Innovation Campus Shanghai will sum up to around EUR280 million.

This further expansion demonstrates BASF’s continued commitment to further build up innovation capacities in China and the whole Asia Pacific region.

With this expansion, BASF will strengthen its R&D capabilities for advanced materials and systems as well as for chemical engineering in order to serve the needs of growing industries, such as automotive, construction, and coatings.

Accompanying this expansion at the Innovation Campus Shanghai, BASF is establishing a sounding board made up of experts from top universities in Asia as part of the Network for Asian Open Research (NAO). The sounding board will strengthen BASF’s innovation pipelines and accelerate market introduction by providing professional consultancy for R&D projects, anticipating industry trends, and enhancing the collaborations between BASF and universities.

Launched in 2014, NAO is a joint platform of BASF and meanwhile 12 prestigious universities and institutes in Asia Pacific. To date, more than 70 joint projects have been completed, covering a wide range of research areas including monomers, polymers, surfaces and interfaces, coatings, catalysis, battery materials, chemical and process engineering, insecticides, as well as digitalization and smart manufacturing in R&D.

The Innovation Campus Shanghai has become an innovation powerhouse for BASF and its partners. Over the past five years, the Innovation Campus Shanghai has applied for more than 220 patents. The site plays an increasing role in the development of innovations for the automotive, construction and consumer goods industries.

As MRC reported earlier, in April 2021, Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, and BASF announced the intention to expand their businesses with the production of styrene monomer (SM) based on circular feedstock. The enhanced collaboration between Trinseo and BASF aims to increase efforts by both companies in the development and management of SM featuring an improved environmental profile.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.

Chemours reported decline in Q1 net income

MOSCOW (MRC) -- US-based producer Chemours reported on Monday a year-on-year decline in Q1 net income but still raised its outlook for 2021, said the company.

First-quarter income fell because costs rose faster than revenue. Also, Chemours reported a tax charge of USD5m versus a benefit of USD23m from the same time in Q1 2021. The following shows the company's Q1 financial performance. Figures are in millions of dollars.

"We are off to a great start in 2021 as the broad economic recovery drove strong year-over-year and sequential volume growth across the majority of our portfolio, leading to the highest quarterly sales total in more than 2-years," said Chemours President and CEO Mark Vergnano. "This outcome was achieved despite managing through supply chain challenges and operational headwinds, most notably from Winter Storm Uri. Looking ahead, our strong 1Q results and growing confidence in the outlook allows us to raise our 2021 full-year Adjusted EBITDA range by USD100 million with Free Cash Flow now expected to be greater than USD450 million."

First quarter 2021 Net Sales were USD1.4 billion, 10% higher than the prior-year quarter, which included a negative 1% portfolio impact from the exit of the aniline business. 11% volume growth was the primary driver of the better year-over-year sales performance with positive contributions from every segment, led by robust growth in Titanium Technologies and Advanced Performance Materials. The 7% sequential sales improvement was supported by a global macro recovery that drove sales higher in Titanium Technologies, Thermal & Specialized Solutions, Advanced Performance Materials, and Chemical Solutions after accounting for portfolio changes.

First quarter Net Income was USD96 million, resulting in EPS of USD0.57. Adjusted Net Income was USD120 million, resulting in Adjusted EPS of USD0.71, flat vs. the prior-year quarter. Adjusted EBITDA for the first quarter 2021 was USD268 million in comparison to USD257 million in the prior-year first quarter, a result of higher volume and favorable currency impact, partially offset by lower average pricing, under absorption of fixed costs stemming from Winter Storm Uri related plant shutdowns, and higher performance-related compensation. The cost impact of Winter Storm Uri, excluding the impact of lost sales, on Adjusted EBITDA is USD9 million, mostly in Thermal & Specialized Solutions. Free Cash Flow improved USD41 million vs. the prior-year quarter primarily driven by lower capital expenditures.

Chemours reported USD268m in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) up from USD257m from Q1 2021. Winter storm Uri represented a USD9m hit in adjusted EBITDA, excluding its effect on sales. The costs from the storm were mostly in Chemours's Thermal & Specialized Solutions segment.

As per MRC, Chemours says it is looking to achieve a 60% absolute reduction of operations-related greenhouse gas emissions by 2030, and net zero greenhouse gas emissions by 2050. In addition to refrigerants, Chemours is a major producer of titanium dioxide, industrial fluoropolymer resins and derivatives and other chemical solutions.

As MRC informed before, in December 2019, Chemours announced plans to sell its methylamines and methylamides unit to Belle Chemical, an affiliate of Cornerstone Chemical. The sales price was not disclosed. Thus, Chemours had signed a letter of commitment with Belle Chemical Co. to sell Chemours' methylamines and methylamides business and production facilities at the Belle location. Earlier in 2019, Chemours announced it would stop making methylamines and methylamides at the plant. In 2020, it planned to start dismantling the methylamines operations. Once Belle takes possession of the plant, most of the employees at Belle and others assigned in supporting roles at other locations will become part of Belle, Chemours said. Cornerstone makes acrylonitrile (ACN) and melamine at Fortier, Louisiana.

ACN is a feedstock for the production of acrylonitrile-butadiene-styrene (ABS).

According to the ICIS-MRC Price Report, Plastik (Uzlovaya) increased the price of ABS for Russian converters for the second half of March. So, unpainted material is offered by the plant at a price of Rb282,000-290,000/tonne FCA Nodal, including VAT.

Chemours is a global leader in titanium technologies, fluoroproducts and chemical solutions, providing its customers in a wide range of industries with market-defining products, application expertise and chemistry-based innovations. Chemours ingredients are found in plastics and coatings, refrigeration and air conditioning, mining and oil refining operations and general industrial manufacturing. Chemours has approximately 9,000 employees across 37 manufacturing sites serving more than 5,000 customers in North America, Latin America, Asia-Pacific and Europe. Chemours is headquartered in Wilmington, Del.

Hexion closes sale of phenolic specialty resins

MOSCOW (MRC) -- Hexion Inc, a major American manufacturer of phenol and bisphenol A (BPA), has announced that it has completed the sale of its Phenolic Specialty Resin, Hexamine and European-based Forest Products Resins businesses for approximately USD425 million to Black Diamond and Investindustrial, according to BusinessWire.

The consideration consists of USD335 million in cash and certain assumed liabilities with the remainder in future proceeds based on the performance of the business.

The company expects to use the sale proceeds to invest in its business and further reduce its debt.

Commenting on the transaction, Craig Rogerson, Chairman, President and Chief Executive Officer, Hexion, said: “This sale strengthens our balance sheet, while maintaining a strong specialty chemical portfolio going forward. I want to thank our associates within our Phenolic Specialty Resins, Hexamine and European-based Forest Products Resins businesses for their many contributions and wish them well going forward.”

The transaction was announced in September 2020. Credit Suisse acted as Hexion’s financial advisor, Paul, Weiss, Rifkind, Wharton & Garrison LLP as lead legal counsel, and Freshfields Bruckhaus Deringer as European counsel.

As MRC informed before, Hexion shut down its BPA plant in the Netherlands for scheduled maintenance in early November, 2020. The turnaround at this plant with a capacity of 120,000 mtyear of BPA, located in Pernis, the Netherlands, lasted until the end of November, 2020.

Bisphenol A is used as a hardener in the production of plastics, as well as plastic-based products. It is one of the key monomers in the production of epoxy resins and polycarbonate (PC).

According to MRC's ScanPlast report, overall estimated consumption ofPC granules grew in the Russian market by 27% year on year in January-February 2021 (excluding imports and exports to/from Belarus) to 16,000 tonnes, compared to 12,600 tonnes a year earlier.

Hexion Inc., formerly Momentive Specialty Chemicals Inc., is a chemical company based in Columbus, Ohio. It manufactures thermosetting resins and related technologies and specialty products. Hexion has two divisions: the epoxy, phenolic and coating resins division and the forest products division.

Chemical Activity Barometer up by 0.7% in April - ACC

MOSCOW (MRC) -- ACC’s chemical activity barometer (CAB), a leading indicator and composite index of industry activity, rose 0.7% sequentially in April on a three-month moving average (3MMA) basis, following a 1.1% gain in March and an 0.9% gain in February, according to ACC.

The CAB was up 12.0% on a year-on-year (YOY) basis, as the year-ago period represents the trough of the COVID-19 recession.

“The latest CAB reading is consistent with solid expansion of commerce, trade and industry,” said Kevin Swift, chief economist at ACC.

In April, production-related indicators were positive. Trends in construction-related resins and related performance chemistry were solid, indicative of robust gains in this sector.

Resins and chemistry used in other durable goods were strong, reflecting growing orders for light vehicles, furniture, capital equipment, consumer electronics and other durable goods.

Plastic resins used in packaging and for consumer and institutional applications were positive, a mark of rising consumer spending. Performance chemistry for industry was largely positive, reflecting strength in manufacturing. US exports were positive.

Equity prices showed further gains. Product and input prices were positive, as were inventory and other supply chain indicators.

As MRC informed before, ACC’s chemical activity barometer rose 1.5% in January, following a 1.3% increase in December, on a sequential three-month moving average (3MMA). The barometer was up 1.3% on a year-on-year (YOY) basis in January.

We remind that Russia's output of chemical products rose in February 2021 by 5.3% year on year. Thus, production of basic chemicals increased year on year by 7.5% in the first two months of 2021, according to Rosstat's data. February production of polymers in primary form was 861,000 tonnes versus 196,000 tonnes in January. Overall output of polymers in primary form totalled 1,770,000 tonnes over the stated period, up by 8.4% year on year.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.